The automotive business is growing both in Opolian Silesia and in Lower Silesia. Special economic zones and investments by leading brands such as Mercedes-Benz, Toyota and LG are attracting more vehicle and subassembly manufacturers to the region.
The car industry is a major sector of the Polish economy, accounting for eight percent of Poland’s GDP. What’s more, the Polish Alternative Fuels Association has reported that Poland is the world’s tenth largest exporter of subassemblies with its exports totalling USD 12.3 billion. 483,800 vehicles were produced in Poland in 2022 - an increase of 10.1% year-on-year (data from the Polish Automotive Industry Association).
Being eyed by developers
“The growth of the automotive industry has a strong impact on the Polish industrial and warehouse market – it maintains strong momentum not only in Upper Silesia, but also in Lower Silesia and Opolskie. According to Newmark Polska, approximately 10 percent of total take-up in Lower Silesia comes from automotive manufacturers. This figure may actually be higher as the statistics do not include space leased by their suppliers or other companies indirectly cooperating with the automotive sector,” says Jakub Kurek, Head of Industrial and Warehouse, Newmark Polska.
Anna Domańska, Advisor, Industrial and Warehouse Department, Newmark Polska, adds that Opolskie, sandwiched between Wrocław and Katowice, is a very attractive location for automotive companies, especially those cooperating with contractors in these two markets. “With approximately 246,000 sqm of warehouse stock, Opolskie is a small market but it is being eyed by developers looking for new opportunities in the region. Major projects recently announced include the start of the extension of CTPark Opole which will see the construction of a build-to-suit facility for truck cooling systems supplier TitanX Engine Cooling. TitanX has leased 11,600 sqm in CTPark Opole since 2018. It will move into a new 26,000 sqm building in October this year, taking occupancy of 18,200 sqm and another 8,000 sqm in 2025,” comments Anna Domańska.
Plots waiting for investors
The largest automotive tenant transactions of recent years in Lower Silesia and Opolian Silesia were for space in such logistics and industrial complexes as Segro Logistics Park Wrocław (34,200 sqm), Panattoni BTS Ideal Automotive 2 (27,400 sqm), CTPark Opole (26,000 sqm) and BIK Park Wrocław I (11,250 sqm).
“Availability of suitable land is an important criterion when shortlisting potential manufacturing plant locations. Both Lower Silesia and Opolian Silesia have banks of large and well-connected sites suitable for manufacturing and warehousing. Developers have ready-to-develop plots in their portfolios and are able to deliver the right kind of building within 10-12 months from signing an agreement. Manufacturing facilities require special improvements and additional specialist features, so they are usually developed on a build-to-suit basis,” says Jakub Kurek.
Automotive giants are a magnet for the whole sector
The automotive landscape in south-western Poland has gone through a period of significant change in recent years. The region’s rapid growth has been powered, among other things, by the launch of Special Economic Zones: Legnica, Wałbrzych, Kamienna Góra and Tarnobrzeg.
“The growth of the automotive sector in Lower Silesia is being significantly driven by the presence of some of the world’s leading market players such as Toyota, Gates, Lear, and Faurecia. These well-known brands have added to the region’s competitiveness and technological know-how. In addition, companies present in the region have increased their manufacturing capacity in recent years,” says Małgorzata Zborowska-Stęplewska, co-owner of AutomotiveSuppliers.pl. She notes that new investments have significantly fuelled the growth of the automotive industry in Lower Silesia. Key investors include Mercedes-Benz Manufacturing Poland, which has invested in production of EV engines and batteries, and LG Energy Solution Wrocław, the largest manufacturer of lithium-ion batteries for electric vehicles in Europe.
Mercedes and Jelcz are set to build
Mercedes-Benz is not resting on its laurels in Lower Silesia. Last December it announced that it would invest EUR 1.3 billion in a new factory of electric light commercial vehicles in Jawor. The plant will be built near the existing Mercedes factory. Construction is due to start in 2024, with approximately 2,500 new jobs to be created.
JELCZ Sp. z o.o., an automotive company of Polska Grupa Zbrojeniowa and an undisputed leader in delivering chassis for specialist constructions to the Polish Army, is also planning to expand. Its new facility is to be much larger than the existing plant.
Other significant drivers of the automotive industry growth in Lower Silesia include the presence of Toyota, which has two plants in the region: one in Wałbrzych (which celebrated 20 years of operations last year) and the other in Jelcz-Laskowice, and Volkswagen Motor Polska, with its car engine plant in Polkowice, established in 1999.
Another high-profile investment in Lower Silesia is Intel’s new semiconductor assembly and test facility in Miękinia near Wrocław. The investment will total USD 4.6 billion and will create nearly 2,000 new jobs. “The global semiconductor crisis has hit the automotive market, but not only. Factories were forced to suspend or cut production, with lead times becoming much longer. So, the construction of the facility near Wrocław is a strategic decision with international significance,” comments Jakub Kurek.
Wrocław offers know-how and innovation
Anna Domańska regularly advises clients on industrial and warehouse space in Lower Silesia and has seen how much the perception of the region and Wrocław has changed in recent years. “International corporations value Wrocław for its openness, friendliness, excellent universities and the largest cluster of young tech companies in Poland. They call it the Polish Silicon Valley. So, there must be something in it. One of the largest technological parks in Poland is located in the centre of the city. It has almost 200 tenants and this year it has welcomed Berlin-based tech company IAV, which develops automotive technologies for such brands as Porsche, Audi, and Bugatti. This shows that the automotive sector in Lower Silesia is not only about production per se, but also development and innovation,” says the expert.
Ready for e-mobility
What is out there for companies looking for warehouse and industrial space in Opolskie and Lower Silesia? “At the end of June 2023, Lower Silesia had nearly 315,000 sqm of ready-to-occupy space. The largest volumes were available in Wrocław (120,000 sqm), Legnica (55,000 sqm) and Głogów (45,000 sqm). In addition, developers have secured plots for development with potential to deliver more than 2,5 million sqm in the future. At the end of the second quarter, there was 7,000 sqm of unoccupied space in Opolskie and close to 9,000 sqm of vacant space under construction. Major projects in the pipeline in the region include Prologis Park Ujazd, which will provide more than 150,000 sqm upon completion,” answers Jakub Kurek.
Market analysts say that the outlook for the automotive sector in Wrocław and Opole is positive. “With its planned plant in Jawor, Mercedes-Benz Vans is an example of a well-known brand that has chosen to invest in Lower Silesia. This decision is likely to attract the attention of other companies from the automotive sector thinking of expanding or relocating their manufacturing plants. Neighbouring on the Lubuskie province, Lower Silesia is also an attractive destination for e-mobility investments. The projects of the MINTH Group and SANHUA Holding Group in Szprotawa are indicative of this sector’s potential and growth prospects,” concludes Małgorzata Zborowska-Stęplewska.